Elevated summertime temperatures in urban `heat islands' increase cooling-energy use and accelerate the formation of urban smog. Except in the city's core areas, summer heat islands are created mainly by the lack of vegetation and by the high solar radiation absorptance by urban surfaces. Analysis of temperature trends for the last 100 years in several large U.S. cities indicate that, since ~1940, temperatures in urban areas have increased by about 0.5-3.0°C. Typically, electricity demand in cities increases by 2-4% for each 1°C increase in temperature. Hence, we estimate that 5-10% of the current urban electricity demand is spent to cool buildings just to compensate for the increased 0.5-3.0°C in urban temperatures. Downtown Los Angeles (L.A.), for example, is now 2.5°C warmer than in 1920, leading to an increase in electricity demand of 1500 MW. In L.A., smoggy episodes are absent below about 21°C, but smog becomes unacceptable by 32°C. Because of the heat-island effects, a rise in temperature can have significant impacts. Urban trees and high-albedo surfaces can offset or reverse the heat-island effect. Mitigation of urban heat islands can potentially reduce national energy use in air conditioning by 20% and save over $10B per year in energy use and improvement in urban air quality. The albedo of a city may be increased at minimal cost if high-albedo surfaces are chosen to replace darker materials during routine maintenance of roofs and roads. Incentive programs, product labeling, and standards could promote the use of high-albedo materials for buildings and roads. Similar incentive-based programs need to be developed for urban trees.